Yen Falls Amid Risk-on Mood

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Tuesday amid increasing risk-on mood by the investors, as markets breathe a temporary sigh of relief amid reports that U.S. President Donald Trump may hold back some of the reciprocal tariffs set to take effect on April 2. However, the uncertainty about fresh tariffs continues to weigh on market sentiment.

Trump is said to be adopting a more moderate approach to the tariffs, likely omitting a set of industry-specific tariffs.

Investor confidence is also bolstered by China's stimulus plans to increase demand and the excitement surrounding a potential peace agreement between Russia and Ukraine.

In economic news, members of the Bank of Japan's Monetary Policy Committee believe that the country's prices and economic activity are in line with expectations, minutes from the central bank's January 23-24 meeting revealed on Tuesday. Overall inflation continues to gradually advance toward the price stability target of 2 percent, the minutes said.

At the meeting, the central bank raised its short-term interest rate to the highest in 17 years, aiming for a price stability target of 2.0 percent amidst rising wages. BoJ policy board members raised the overnight call rate to around 0.5 percent from 0.25 percent - marking the highest since the global financial crisis in 2008.

In the Asian trading today, the yen fell to nearly a 3-month low of 195.01 against the pound and more than a 3-week low of 150.94 against the U.S. dollar, from yesterday's closing quotes of 194.86 and 150.78, respectively. If the yen extends its downtrend, it is likely to find support around 200.00 against the pound and 157.00 against the greenback.

Against the euro and the Swiss franc, the yen slipped to 6-day lows of 163.03 and 170.95 from Monday's closing quotes of 162.88 and 170.80, respectively. The yen may test support near 165.00 against the euro and 173.00 against the franc.

Against the Australia and the New Zealand dollars, the yen dropped to a 6-day low of 94.92 and a 5-day low of 86.40 from yesterday's closing quotes of 94.79 and 86.35, respectively. On the downside, 98.00 against the aussie and 89.00 against the kiwi are seen as the next support levels for

The yen edged down to 105.42 against the Canadian dollar, from Monday's closing value of 105.32. The next possible downside target for the yen is seen around the 108.00 region.

Looking ahead, U.S. S&P/Case-Shiller home price index for January, U.S. Consumer Board's consumer confidence for March, U.S. new home sales data for February and U.S. Richmond Fed Manufacturing index for March are due to be released in the New York session.